More than half of US adults lack “longevity literacy,” jeopardizing their retirement preparedness, according to a new report.
More than half (53%) of US adults are “working with inaccurate information” on life expectancy, according to a report from the Teachers Insurance and Annuities Association of America Institute and George Washington University, “Financial literacy, longevity literacy and retirement readiness.” The results, according to the report authors, is that many Americans could “jeopardize their retirement preparedness,” including planning for potential long-term care needs in the future.
Respondents answered questions about their retirement readiness and financial literacy, including saving habits, knowledge about ways to draw income from savings during retirement, budgeting, expectations in retirement and life expectancy. The survey was completed online in January 2022 by 3,582 adults aged 18 or more years as part of the TIAA Institute-Global Financial Literacy Excellence Center Personal Finance Index.
According to the Social Security Administration, men can expect to live an average of another 22 years when they reach 60, whereas women can expect to live another 25 years.
Fewer than four in 10 (37%) of the respondents, however, demonstrated “strong longevity knowledge,” or a basic understanding of how long people tend to live in retirement. More than a fourth (28%) responded that they didn’t know how long someone would live past age 60, 25% underestimated life expectancy and 10% overestimated life expectancy.
“These findings are significant given that many Americans face the prospect of financial insecurity in retirement,” the report stated. “The challenge is that longevity literacy, like financial literacy, tends to be low among US adults.”
The data revealed that 32% of working adults don’t save for retirement on a regular basis, and only 22% of those saving are “very confident” they are saving enough.
Among those with strong longevity knowledge, 40% indicated that they found it very easy to make ends meet, and 83% said their lifestyle meets or exceeds pre-retirement expectations. Only 23% of those with weak longevity knowledge reported making ends meet, and 63% said their lifestyle meets or exceeds pre-retirement expectations.
According to the report authors, the most striking finding was that women tend to have greater longevity literacy than men: 43% of women demonstrated strong longevity knowledge compared with 32% of men. But financial literacy among women lags compared to men.
Baby boomers and the Silent Generation demonstrated strong longevity knowledge (45% for each group) compared with 30% each for Gen Z and Gen Y. The authors said the results showed a greater tendency among individuals with strong longevity knowledge to be “future-oriented” (63%) compared with those with poor longevity knowledge (40%).